Separately, the Nasdaq has ruled against Microtune in an action that could lead to its being de-listed from the stock exchange.

Microtune's Nijmegen Design Center in the Netherlands focused on the development of digital TV demodulation chips. Microtune (Plano, Texas) had operated the center since October 2001.

Micronas (Zurich, Switzerland), an application specific semiconductor developer, said it would retain 23 employees at the Nijmegen Design Center. Micronas, traditionally strong in analog TV solutions and digital audio and video processing ICs, hopes through the acquisition to build a more prominent presence in the European terrestrial digital TV market by expanding its product portfolio.

The goal is capturing part of the booming broadcast digital TV market in the U.K. as well as Germany's emerging digital TV market, he explained.

While the Nijmegen Design Center was never profitable, the group maintained a reputation for developing solid products such as its OFDM demodulation chip. "Operation is very robust even under weak signals," said Desor.

For Microtune, the sale could signal a shift in strategy in how it plans to penetrate the European digital TV market. Although Microtune insisted it continues to develop integrated RF tuners, the company no longer develops all components used in digital TVs or set-tops. Instead, Microtune will partner with Micronas, buying the advanced digital ICs it needs.

During its acquisition binge a few years ago, Microtune acquired SPaSE, a Netherlands-based developer of DVB-T silicon technologies. The unit became Microtune's European design center.

At that time, the Texas company said the acquisition was critical in its plan to develop its own RF and baseband products for digital television applications that initially targeted DVB-T in Europe. However, the Nijmegen center failed to make the transition to a consumer DTV chip company.

Barry Koch, Microtune's vice president and general manager of German-based automotive business unit, said the sale would have no immediate impact on his operation, which focuses on in-car entertainment systems such as an analog/DVB-T hybrid system.

Nasdaq action

Nasdaq issued a staff determination against Microtune that could lead to a delisting of the company's securities. In a release this week, Nasdaq said Microtune failed to comply with filing requirements for continued listing.

The Nasdaq ruling marks a roller coaster week for the developer of silicon cable tuners and Bluetooth ICs. Earlier in the week, a federal court hearing a patent case between Microtune and Broadcom blocked Broadcom from selling a tuner.

Now the company is girding for a fight to keep itself listed on Nasdaq, a move that could affect the company's future standing in the telecommunications sector.

Microtune said it will file its Form 10K in May 2003 to correct the delinquency. The company has also requested a hearing before a Nasdaq listing qualifications panel to review the determination.